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Video: Prosecutors gear up to charge Edwards in criminal case

>>for two years a
federal grand jury
has been in fact investigating
john edwards
and whether he break
campaign finance
laws to try to cover up an affair with rielle hunter. now the investigation reached a decisive point. nbc's senior investigative correspondent lisa miers has more on that.

>> reporter: good morning, matt. this is a tough period for
john edwards
. he had to testify under oath in a
civil case
involving a
sex tape
. now what could be an ominous development in the
criminal investigation
. nbc news learned that prosecutors are preparing to record the testimony of a
key witness
for use in any future trial. sources close to the investigation say prosecutors now believe they have a strong case. but they have not yet gotten the
green light
from washington to charge
edwards
with a crime. since the tragic death of
elizabeth edwards
, friends say
john edwards
is focusing his energy on his children and has moved back into the family estate in
chapel hill
. increasingly he must worry about more fallout from his affair with rielle hunter. last week he had to testify under oath in a
civil case
over a sex case he allegedly made with hunter. far more menacing, a parade of witnesses at this courthouse 30
miles away
.
federal prosecutors
are trying to prove that he spent more than a million dollars to conceal his affair with hunter.

>>we know
john edwards
acted badly, lied to supporters, his family, his wife. the only remaining question is were his actions criminal or not?

>> reporter: it was
2007
.
edwards
was running for president. two donors each began providing hundreds of thousands of dollars used to keep a pregnant hunter out of sight.

>>if
john edwards
was aware that money was being paid to hide his mistress and it was to help the campaign he's in trouble.

>> reporter: edwards
has denied knowing about it.

>>i know nothing about this.

>> reporter: fred baron
said
edwards
knew nothing about flying her in his
private jet
. but that's disputed by
edwards
aid who lived with hunter in hiding. young said
edwards
himself solicited money and helped orchestrate the cover-up. much of the money came from bunny melon. prosecutors plan to visit her sprawling virginia estate and record her testimony for a future trial since she's 100 years old. a key question, why, according to insiders, did she send $700,000 in checks through her decorator, one packed in a box of chocolates.

>>is it proper for a
presidential campaign
to accept six-figure contributions or donations from somebody and claim that it's personal money?

>> reporter: melon's lawyer said she was trying to help
edwards
with a personal problem and had no idea what the problem was.
john edwards
has said he did nothing wrong. a spokesperson said he remains optimistic that the investigation will confirm that. matt?

WASHINGTON — A two-year grand jury investigation of John Edwards has reached a decisive point. Prosecutors believe they have a strong case, but have not yet gotten a green light from the Justice Department to charge the former presidential candidate, NBC News has learned. The issue: did Edwards violate election laws by trying to cover up his affair with a campaign videographer, Rielle Hunter.

Sources close to the investigation say Justice Department attorneys are now conducting a final review of evidence, and an indictment could come within days or weeks. In what could be an ominous development for Edwards, prosecutors already are making arrangements to record the sworn testimony of a key witness for possible use in a future trial, said the sources, speaking on condition of anonymity.

“It would be surprising now if he wasn’t indicted,” said Stephen Saltzburg, a former federal prosecutor and George Washington University law professor. “If John Edwards was aware that money was being paid to hide his mistress... and it was done to help his campaign, then he’s in trouble.”

Edwards’ attorney, Wade Smith, recently said, “We do not believe there is evidence that John has violated any election laws.” John Edwards, 57, has repeatedly said that he did nothing wrong, and a spokesperson said he remains optimistic that the investigation will confirm that.

Flurry of activity
A parade of grand jury witnesses and a flurry of new subpoenas over the past few months suggest the probe intensified as Elizabeth Edwards died of cancer in early December. Edwards’ friends in North Carolina say the timing could not be worse as “John has moved back into the family home so that he can take care of his children... John is working every day to be a good father and this is an inopportune time for this to occur," said a source close to the family.

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Federal prosecutors are trying to prove Edwards had a hand in the payment of more than $1 million provided by two key supporters…money used, according to numerous sources, to keep Hunter quiet and out of sight. Prosecutors are examining whether the money spent on Hunter should have been treated and reported as campaign contributions, since keeping her way from the press was crucial to Edwards remaining a viable candidate. One year ago, Edwards admitted he fathered a little girl with Hunter. Frances Quinn Hunter turns 3 on Feb. 27.

“We already know that John Edwards acted badly. We already know that he lied to his supporters. We know he lied to his family and wife,” said political consultant and watchdog Joe Sinsheimer. “The only remaining question: Were John Edwards’ activities criminal or not?”

Paper trail: a complex puzzle
FBI and IRS agents are searching the records of the Edwards campaign and at least five organizations with links to Edwards, according to sources once close to the former candidate. The organizations include the One America Committee, a political action committee; the Alliance For A New America, a tax-exempt political organization; and the Center for Promise and Opportunity, a nonprofit that once addressed global poverty issues with Edwards as its honorary chair.

The PAC and nonprofit equally split payments totaling nearly $250,000 to Rielle Hunter’s company, Midline Groove Productions, for video she produced in 2006, according to a source familiar with many of the organizations associated with Edwards. Hunter famously followed Edwards on pre-campaign appearances in Iowa and New Hampshire, and made a trip with him to Africa.

More than a dozen witnesses have testified before the grand jury at the U.S. Courthouse in Raleigh, N.C., including campaign managers and political operatives, Edwards’ friends and his former mistress, who arrived with Edwards’ baby in her arms. But the central witness may be former campaign staffer Andrew Young, an aide apparently so devoted that he falsely claimed paternity of the child and lived with Hunter in hiding before finally turning on his boss with a tell-all book, titled "The Politician." Insiders say another group put the former aide on its payroll and gave him a raise while he was engaged in the cover-up.

Focus on two wealthy donors
The money used to support Hunter and Young in hiding came from two wealthy Edwards donors: a reclusive heiress, Rachel “Bunny” Mellon, and Edwards’ former finance chairman, Fred Baron. Insiders say, each provided hundreds of thousands of dollars, for a total of more than $1 million.

Baron said, shortly before his death in 2008, that Edwards knew nothing about the money, which Baron spent to fly Hunter and Young around in his private jet, and to hide Hunter in lavish rented homes in Santa Barbara, Calif. The owner of one home in a gated community near Oprah Winfrey’s mansion, told NBC News that Baron paid a monthly rent of $20,000. Edwards said in a televised interview in August 2008 that he didn’t know anything about the money.

The denials by Edwards and Baron are vigorously disputed by Young, the former aide, who says Edwards solicited money and helped orchestrate the cover-up.

Young has written that he received about $700,000 in checks from Mellon, one of Edwards’ largest political contributors: “Finally we focused on Bunny Mellon, who had made it clear she would give Edwards money for extraneous expenses with no explanation required. Edwards called her, and the ‘Bunny money’ began to flow.”

Young said Mellon wrote checks to a North Carolina interior decorator, Bryan Huffman, who then forwarded the checks to Young. The decorator told NBC News the checks came with little notes that said things like “this is to save the nation” and “for the rescue of America.” One check was enclosed in a box of chocolates, said Huffman.

Young has written that he spent the money on Hunter’s living expenses and to buy her a $28,000 BMW: “After I received each check, it was deposited in joint accounts I held with (my wife), to be used to keep Rielle happy and hidden from the media, Mrs. Edwards and anyone who might divulge her existence. This is the arrangement the senator expected me to follow so he would have 'plausible deniability.'”

Special arrangements for key testimony
Prosecutors plan to visit the 100-year-old Mellon at her estate in Upperville, Va., to record her testimony, so it’s preserved for any future trial, according to sources with knowledge of the case. Edwards’ attorneys would be allowed to cross-examine Mellon and Edwards has the right to attend, should he choose to.

Andrew Young and Mellon’s attorney, Alex Forger, have said Mellon understood her payments were a “gift” for a personal matter but that she had no idea she was paying to hide a mistress.

Case observers say the government must prove the money from Mellon and Baron was not a gift, but actually political support for Edwards. And Saltzburg, the former prosecutor, said prosecutors need evidence that Edwards had knowledge of the cover-up: “As long as he’s a knowing participant, then he is liable for what happens and indeed will probably be called a co-conspirator.”

The issue troubles Sinsheimer, the political consultant, who argues that to allow spending of this magnitude by wealthy donors makes a sham of campaign finance limits.

“I mean the whole thing is outrageous... Can Bunny Mellon give $700,000 to a presidential candidate of her choice just because she wants to? Is it proper for a presidential campaign to accept six-figure contributions from somebody and claim it’s just personal monies?”

However, some former federal prosecutors questioned the amount of resources poured into this case, pursued for more than two years now by U.S. Attorney George Holding, a Republican. Prosecutors have spread a wide net, interviewing staffers all the way back to Edwards’ campaign for the Senate.

“There must not be much other crime in North Carolina,” said one former public corruption prosecutor. “What’s the point of pursuing this kind of case against a guy who’s already been thoroughly disgraced?”

Saltzburg said he also is surprised the investigation is still going on. “It does seem like old news and it seems like there is a lot more that’s worth investigating.

Early family portrait

In an undated photograph, future Sen. John Edwards, bottom right, sits with his sister, Kathy Edwards, left, and parents Bobbie and Wallace. He was born on June 10, 1953, in Seneca, S.C.
(Corbis)
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Gridiron pose

In 1970, Edwards was a member of the North Moore High School Mustangs varsity football team during his senior year.
(Edwards Family via AP)
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I thee wed

A son's legacy

Edwards stands with his late son, Wade, on Mount Kilimanjaro in 1995. Less than a year after the Kilimanjaro trek, Wade was swept away with the high winds that pushed his Jeep off a highway in April 1996.
(Edwards Family via AP)
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Visiting the White House

Left to right, John Edwards, Cate Edwards, Hillary Clinton, Wade Edwards and Elizabeth Edwards in the Oval Office at the White House in Washington, D.C., on March 13, 1996. Wade Edwards was invited to a reception honoring the American National Endowment for the Humanities National Essay Winners.
(Courtesy, Williiam J. Clinton Pr)
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Order in the court

A successful trial attorney, on Sept. 5, 1997, Edwards, right, sits with clients Sandy and David Lakey as they await what turned out to be the largest personal injury verdict in North Carolina history, $25 million in compensatory damages for injuries suffered by their daughter in a swimming pool.
(The News Observer / ZUMA Press)
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Hat in the ring

On Sept. 16, 2003, Edwards, along with his family, from left, daughter Catherine, son Jack, daughter Emma Claire and his wife Elizabeth, wave to supporters at the old Milliken Mill in Robbins, N.C., where he officially announced his candidacy for the Democratic nomination for the presidency of the United States.
(Ellen Ozier / Reuters)
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Book barnstorming

Now a presidential candidate, Edwards smiles while signing copies of his book, "Four Trials," at a bookstore in Concord, N.H., on Dec. 22, 2003.
(Brian Snyder / Reuters)
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Opening day

A day before Iowa's electoral caucus on Jan. 19, 2004, Edwards pauses during a campaign stop in Davenport. Sen. John Kerry won in Iowa, with Edwards finishing second.
(John Gress / Reuters)
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Facing facts

Edwards pauses during a speech at Broughton High School, in his hometown of Raleigh, N.C., on March 3, 2004, before formally announcing the end of his underdog campaign and praising John Kerry as the right man to challenge President Bush for the presidency.
(Ellen Ozier / Reuters)
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Kerry/Edwards 2004

Supporters of Democratic presidential candidate Sen. John Kerry display their support at an event in Market Square in Pittsburgh on July 6, 2004, where Kerry formally announced that his former rival, Edwards, would be his vice presidential running mate.
(Hector Mata / AFP - Getty Images)
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Vice presidential debaters

Vice President Dick Cheney, left, listens to Edwards answer a question during their campaign debate on Oct. 5, 2004, at Case Western Reserve University in Cleveland.
(Tony Dejak / AP)
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Conceding defeat

Edwards and Kerry stand together at Faneuil Hall in Boston on Nov. 3, 2004, as the pair conceded defeat to President Bush in the presidential election.
(Jeff Haynes / AFP - Getty Images)
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Breast cancer diagnosis

Edwards, with his wife, Elizabeth, right, and their daughter Cate, look to supporters following Sen. John Kerry's concession speech in Boston on Nov. 3, 2004. That same day it was reported that Elizabeth Edwards was diagnosed with breast cancer.
(Amy Sancetta / AP)
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Katrina comments

At the formal opening of his new poverty center in Chapel Hill, N.C., on Sept. 7, 2005, Edwards joins critics who panned the Bush administration's response to Hurricane Katrina, saying the president was slow and indecisive in making decisions about the disaster.
(Jeffrey A. Camarati / AP)
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Lending support

On Aug. 17, 2006, Edwards waits to speak at a rally for Senate nominee Ned Lamont, D-Conn., at Yale University School of Medicine in New Haven, Connecticut. Lamont went on to beat Sen. Joe Lieberman in the Democratic primary, but lost to Lieberman, who ran as an independent, in the general election.
(Darren Mccollester / Getty Images)
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Back in the race

Edwards walks past a cordon of student volunteers as he arrives to announce his candidacy for president, Dec. 28, 2006, at a house affected by Hurricane Katrina in New Orleans.
(Charles Dharapak / AP)
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Family ties

Edwards is introduced by daughter Emma Claire during a March 13, 2007, rally at Bennett College in Greensboro, N.C.
(Gerry Broome / AP)
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A new challenge

Leaving the race

John Edwards speaks on January 30, 2008. He is watched by his wife and children on Bartholomew Street in the Upper Ninth Ward in New Orleans, where the Habitat for Humanity project Musician’s Village is being built. Edwards pulled out of the White House race, leaving the fight for the Democratic nomination to bitter rivals Hillary Clinton and Barack Obama.
(Matthew Hinton / AFP - Getty Images)
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Obama endorsement

Sen. Barack Obama and Edwards wave during a rally at Van Andel Arena on May 14, 2008 in Grand Rapids, Mich., following Edwards' endorsement of Obama after Sen. Hillary Clinton won the West Virginia primary.
(Mark Wilson / Getty Images)
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Admitting an affair

Bob Woodruff interviews John Edwards on ABC News Friday, Aug. 8, 2008 in Chapel Hill, N.C. The former North Carolina senator, who was the Democratic vice presidential nominee in 2004, confessed to ABC News that he had lied repeatedly about the affair with 42-year-old Rielle Hunter.
(AP)
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Funeral for Elizabeth

John Edwards and his children, Emma Claire, left, Jack and Cate, far right, leave the funeral service for Elizabeth Edwards at Edenton Street United Methodist Church in Raleigh, N.C., on Saturday, Dec. 11, 2010. Elizabeth died Tuesday, Dec. 7 of cancer at the age of 61.
(Jim R. Bounds / AP)
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Facing indictment

John Edwards is accompanied by his daughter, Cate Edwards, left wearing red, as he departs the U.S. District Court after pleading not guilty to six federal charges in Winston-Salem, N.C., June 3, 2011. Edwards was indicted for using nearly $1 million in illegal campaign funds to help cover up an extramarital affair during his White House bid.
(Davis Turner / Reuters)
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Difficult testimony

Cate Upham glances at her father, former Sen. John Edwards as they leave the Federal Courthouse in Greensboro, N.C., May 2, 2012. Upham left the courtroom crying during testimony about a confrontation between her father and deceased mother. Edwards is charged with six criminal counts related to payments from wealthy donors that were used to conceal his mistress and the child they had.
(Chuck Liddy / The News & Observer via AP)
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Not guilty

John Edwards speaks outside a federal courthouse as his daughter Cate Upham, left, and his parents Wallace Edwards, second from right, and Bobbie Edwards, right, stand by his side after the jury's verdict in his trial on charges of campaign corruption in Greensboro, N.C., Thursday, May 31, 2012. The jury found Edwards 'not guilty' on one count of accepting illegal campaign contributions and a mistrial was declared on the remaining five charges because the jurors were deadlocked. Edwards said in a statement following the verdict, "While I don't believe I did anything illegal, I did an awful, awful lot that was wrong and there is no one else responsible for my sins."
(Chuck Burton / AP)
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Editor's note:
This image contains graphic content that some viewers may find disturbing.